SOFT NUMBERS INDICATE HARD LANDING AHEAD
We have been witnessing an artificial economic recovery fueled by a housing bubble, generous Fed and low interest rates . The housing market has topped out , interest rates are rising and now its time to pay the piper .
The year end indictors, courtesy of the Progressive Review, are a telling reflection that the current economic recovery is artificially induced and is now standing on very shaky ground with the very real possibility of a hard fall and landing ahead.
Allen L Roland
http://maxspeak.org/mt/archives/001849.html
- Inflation-adjusted hourly and weekly wages are still below where they were at the start of the recovery in November 2001. Yet, productivity-the growth of the economic pie-is up by 13.5%.
- Wage growth has been shortchanged because 35% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 22% in previous periods.
- Median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389.
- The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years.
- The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago.
- The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%.
- The personal savings rate is negative for the first time since WWII.
- The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina) than in March 2001 (the start of the recession).
Private sector jobs are up only 0.8%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%.
- More than 3 million manufacturing jobs have been lost since January 2000.
- The number of people living in poverty has increased by 5.4 million since 2000.
- The child poverty rate increased from 16.3% in 2001 to 17.8% in 2004.
- Family health costs rose 43-45% for married couples with children, single mothers, and young singles from 2000 to 2003.
- Last year, the percent of people with employer-provided health insurance fell for the fourth year in a row. Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000.
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